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Wednesday January 22nd, 2020 3:16PM

Health care, schools top finance-heavy agenda in states

By The Associated Press
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JEFFERSON CITY, Mo. (AP) — Big-dollar decisions about health care and education will top the agenda in many state capitols as lawmakers convene for their 2019 sessions with a closer balance between Republicans and Democrats.

Some states will be considering anew whether to expand government-funded health coverage to more people after Democrats put a sizable dent in Republican statehouse dominance during the November elections. Others will be wrestling with how to boost salaries for teachers and funding for their public schools.

State officials also will have to address several weighty issues that arose over the past year — how to recover from disastrous wildfires and floods, whether to legalize sports gambling and recreational marijuana for adults, and whether to make changes to their tax codes in response to recent federal laws and court rulings.

Many of the issues have a common denominator: money.

"The number one issue is always taxes or revenues and expenditures," said Bill Pound, the longtime executive director of the National Conference of State Legislatures. "Given the nature of the economy, given the impact as it's playing out of federal tax reform, that will take a good deal of attention."

The tax overhaul signed one year ago by President Donald Trump will have a trickle-down effect on state income tax returns being filed this year, resulting in a windfall for some states. Lawmakers will have to decide what to do with the money and whether to make changes to their own income tax codes.

Sales tax changes also could be on the agenda in as many as 16 states that haven't yet implemented them after a U.S. Supreme Court decision last summer. That ruling allows states to require online out-of-state retailers to collect taxes on sales made to their residents, a potential source of millions of additional dollars.

When the 2019 legislatives sessions begin, Republicans will control 61 of the 99 state legislative chambers (down from 66 before the November election) and will control both chambers in 30 states. Democrats will have full control of 18 state legislatures. Minnesota will have the only legislature with split partisan control. Nebraska has a single chamber, which is officially nonpartisan.

Democratic gains mean there will be closer margins between Republicans and Democrats in most legislative chambers. Democrats also picked up about a half-dozen governor's offices in the November elections. Republicans will have 27 governors while Democrats will have 23.

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The Democratic surge has helped breathe new life into efforts to expand Medicaid coverage to low-income adults under the terms of the federal health care law signed by President Barack Obama in 2010. But a federal judge's ruling in December that the Affordable Care Act is unconstitutional could bolster resistance among some state lawmakers while the case is appealed.

New Democratic governors in Kansas and Wisconsin will be joining incumbent Democratic chief executives in North Carolina and Montana in pushing for expanded Medicaid programs. But they still must contend with Republican-led Legislatures.

North Carolina has a 2013 law preventing the governor from expanding Medicaid without approval from the General Assembly.

Before Wisconsin Gov.-elect Tony Evers could take office, Republican lawmakers passed measures preventing him from withdrawing Wisconsin from the multistate lawsuit challenging the Affordable Care Act or from withdrawing a work requirement for Medicaid recipients.

Kansas Gov.-elect Laura Kelly told The Associated Press that expanding Medicaid is "a moral obligation that we have as a state." Her election seemed to boost the chances of that happening, since a bipartisan coalition had passed a bill in 2017 that was vetoed by then-Republican Gov. Sam Brownback.

But conservative Republicans gained seats in the Kansas House at moderates' expense, and GOP leaders could bottle up Medicaid expansion bills in legislative committees.

In Montana, the question is whether to continue a 2015 Medicaid expansion that provided health coverage to 95,000 adults but is scheduled to expire mid-year. Gov. Steve Bullock's budget proposal would reauthorize Medicaid expansion and raise an additional $50 million annually through tax increases on such things as tobacco, liquor, hotel rooms and rental cars.

Republicans who control the Legislature have suggested the Medicaid expansion should be means-tested, include a work requirement and possibly drug testing.

If the governor's budget "comes down to 'we need to have those taxes to pay for Medicaid expansion,' then the answer is 'it's not gonna happen,' " said Montana Senate Majority Leader Fred Thomas, a Republican.

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Public schools could be a top issue in at least a third of the states, including Arizona and Oklahoma — two places where teachers went on strike over funding for schools. Arizona lawmakers, who gave teachers a 9 percent raise last year, are on the hook for a pledge of an additional 10 percent raise over the next two years.

In Oklahoma, Republican Gov.-elect Kevin Stitt and lawmakers from both parties all have said additional school funding is a priority this year, even after teachers got an average annual pay hike of $6,100 this past year.

"We have a bunch of members who were elected on two major things: on being supportive of education and reforming state government, so those are the things I think you'll be seeing," said Oklahoma House Floor Leader Jon Echols, a Republican.

Elsewhere, Democratic Louisiana Gov. John Bel Edwards is pushing the first statewide pay raise in a decade for teachers and other school personnel. Governors and lawmakers in Colorado, Kansas and New Mexico are among others considering a funding boost for schools. In Oregon, Democratic Senate President Peter Courtney said a value-added or a gross receipts tax are two possibilities to raise revenue for education.

Oregon lawmakers also could consider a tax on carbon emissions as part of an environmental agenda.

Washington voters in November rejected an initiative to impose the nation's first tax on carbon emissions. Democratic Gov. Jay Inslee is making a retooled bid at addressing climate change with a proposal that would require utilities to produce carbon-free electricity by 2045, forcing the elimination of power plants fueled by coal and natural gas. He also wants to reduce carbon emissions in fuel used for transportation.

"The people decided not to embrace plan A," Inslee said recently. But "this plan B is ready to go, and it can pass this year" in a Legislature that has expanded Democratic majorities.

Illinois Gov.-elect J.B. Pritzker and fellow Democrats in charge of the Legislature are considering legalizing and taxing recreational marijuana to bring in as much as $1 billion annually to the state. Pritzker has promised marijuana tax revenue to both the operating budget and capital programs.

New York Gov. Andrew Cuomo, a Democrat, also is pushing lawmakers to act quickly to legalize recreational marijuana for adults, a move he had opposed just a year ago. Cuomo hasn't said how much the state stands to gain in tax revenue.

Some states also are looking to raise more money by legalizing and taxing sports betting. That comes after the U.S. Supreme Court cleared the way last year for the widespread expansion of sports gambling in states.

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In some states, the 2019 legislative session marks the first opportunity to address the aftermath of deadly disasters.

Nevada's Democratic-controlled state government is expected to pass a ban on bump stocks on guns and tackle other firearm legislation as the Legislature meets for the first time since the October 2017 mass shooting on the Las Vegas Strip. The Trump administration earlier this month banned bump stocks, a regulation that will take effect in the new year but is likely to face a legal challenge from gun rights groups.

Texas Gov. Greg Abbott and the Republican-controlled Legislature will be wrestling with whether to tap as much as $5 billion from the state's rainy-day fund to pay for the recovery from Hurricane Harvey, which swamped the southeast portion of the state in August 2017.

In California, state and federal authorities have estimated it will cost at least $3 billion to clear debris from 19,000 homes and businesses destroyed by three California wildfires last fall.

Fresh off its deadliest wildfire in history, the California Legislature also will have to decide how much responsibility utilities should bear and how to prevent future fires from becoming so deadly as the state grapples with the effects of climate change. One option could entail limitations on new construction.

"We need to think about things like zoning ... where we build and how we build," said Assembly Speaker Anthony Rendon, a Democrat.

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Associated Press writers Amy Hanson in Helena, Montana; Rachel La Corte in Olympia, Washington; Will Weissert in Austin, Texas; Melinda Deslatte in Baton Rouge, Louisiana; Scott Bauer in Madison, Wisconsin; Sean Murphy in Oklahoma City; Kathleen Ronayne and Don Thompson in Sacramento, California; Gary Robertson in Raleigh, North Carolina; John Hanna in Topeka, Kansas; Michelle Price in Las Vegas; Andrew Selsky in Salem, Oregon; Bob Christie in Phoenix; David Klepper in Albany, New York; John O'Connor in Springfield, Illinois; Jim Anderson in Denver; and Morgan Lee in Sante Fe, New Mexico, contributed to this report.

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